[Federal Register Volume 59, Number 153 (Wednesday, August 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19448]


[[Page Unknown]]

[Federal Register: August 10, 1994]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 20439; 812-8856]

 

Nuveen Municipal Bond Fund, Inc., et al.; Notice of Application

August 3, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of Application for Exemption under the Investment 
Company Act of 1940 (``Act'').

-----------------------------------------------------------------------

APPLICANTS: Nuveen Municipal Bond Fund, Inc.; Nuveen Tax-Free Bond 
Fund, Inc.; Nuveen Insured Tax-Free Bond Fund, Inc.; Nuveen California 
Tax-Free Fund, Inc.; Nuveen Multistate Tax-Free Trust (collectively, 
the ``Nuveen Funds''); Nuveen Advisory Corp. (the ``Adviser''); and 
John Nuveen & Co. Incorporated (the ``Distributor'' or ``Nuveen''), on 
their own behalf and on behalf of any other registered open-end 
management investment companies established or acquired in the future, 
or any series thereof, for which Nuveen or a company controlling, 
controlled by, or under common control with Nuveen acts as investment 
adviser or distributor (collectively, with the Nuveen Funds, the 
``Funds'').

RELEVANT ACT SECTIONS: Exemption requested under section 6(c) from the 
provisions of sections 2(a)(32), 2(a)(35), 18(f), 18(g), 18(i), 22(c), 
and 22(d), and rule 22c-1 thereunder.

SUMMARY OF APPLICATION: Applicants seek an order that would permit the 
Funds to issue an unlimited number of classes of shares representing 
interests in the same portfolio of securities, assess a contingent 
deferred sales charge (``CDSC'') on certain redemptions of shares, and 
waive the CDSC in certain instances.

FILING DATE: The application was filed on February 25, 1994, and 
amended on March 28, 1994, May 16, 1994, and July 8, 1994. Applicants 
have agreed to file an additional amendment during the notice period. 
This notice reflects the changes to be made by such additional 
amendment.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicants with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on August 29, 1994, 
and should be accompanied by proof of service on applicants, in the 
form of an affidavit or, for lawyers, a certificate of service. Hearing 
requests should state the nature of the writer's interest, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request such notification by writing to the 
SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 
20549. Applicants: c/o James J. Wesolowski, Vice President and General 
Counsel, John Nuveen & Co. Incorporated, 333 West Wacker Drive, 
Chicago, IL 60606.

FOR FURTHER INFORMATION CONTACT:
Courtney S. Thornton, Senior Attorney, at (202) 942-0583, or Barry D. 
Miller, Senior Special Counsel, at (202) 942-0564 (Division of 
Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the SEC's Public Reference Branch.

Applications' Representations

    1. Each of the Nuveen Fund is either a Maryland corporation, a 
Minnesota corporation, or a Massachusetts business trust, and is 
requested under the Act as an open-end management investment company. 
Several of the Nuveen Funds have multiple series, each of which has 
separate investment objectives and policies, and separate assets. All 
of the Nuveen Funds currently charge varying front-end sales charges in 
connection with the purchase of their shares (ranging from 4.75% to 
.50%, depending on the amount of purchase).
    2. The Adviser, a wholly-owned subsidiary of the Distributor, acts 
as investment adviser for each of the Nuveen Funds. Each of the Nuveen 
Funds has entered into an investment management contract with the 
Adviser under which the Adviser provides the fund with investment 
management and administrative services. The Distributor, a wholly-owned 
subsidiary of the John Nuveen Company, acts as the principal 
underwriter of the shares of the Nuveen Funds, and distributes shares 
directly to the public and through selected broker-dealers.
    3. Applicants propose to adopt a multiple class distribution plan 
(the ``Multiple Class Plan'') for shares of the Funds. Under the 
Multiple Class Plan, each Fund initially will offer three classes of 
shares, which would represent interests in the same portfolio of 
investments and be identical in all respects, except for sales charges, 
class designations, the allocation of distribution expenses, service 
expenses and certain other expenses (as set forth in condition 1 below) 
applicable to such class (``Class Expenses''), voting rights, exchange 
privileges, and conversion features. The Multiple Class Plan would be 
implemented by designating all currently issued and outstanding shares 
of each Fund as Class R shares, and creating to additional classes of 
shares of each Fund: Class A shares and Class C shares. The Funds also 
may offer an additional class of shares designated as Class B.
    4. Class R shares will be available for purchase by (a) unitholders 
of Nuveen-sponsored unit investment trusts (``UITs'') who, on or prior 
to the effective date of the Multiple Class Plan, have purchased such 
UITs and elected to reinvest distributions from such UITs in shares of 
a Fund, (b) holders of Class R shares of a Fund who elect to reinvest 
Fund dividends and capital gain distributions in Class R shares of that 
Fund, and (c) certain identified categories of investors described from 
time to time in the Funds' prospectuses, such as employees of the 
Funds' authorized dealers or members of their immediate families, bank 
trust departments investing funds in a fiduciary capacity pursuant to 
investment discretion, and certain specified categories of financial 
advisers on behalf of their customers. Purchases described in clauses 
(a) through (c) above will not be subject to any sales charge, 
distribution fee, or service fee under a Rule 12b-1 Plan or otherwise.
    5. Class A shares will be subject to a front-end sales charge and a 
plan to be adopted pursuant to rule 12b-1 (a ``Rule 12b-1 Plan'') 
providing for a service fee at an annual rate of up to .25% of average 
daily net assets of Class A shares.
    6. Class C shares will not be subject to any sales charge, but will 
be subject to a Rule 12b-1 Plan that will provide for a distribution 
fee at an annual rate of up to .75%, and a service fee at an annual 
rate of up to .25% of average daily net asset of Class C shares. Class 
C shares automatically will convert to Class A shares a specified 
number of years after purchase, pursuant to the conversion feature 
described below.
    7. The Funds may from time to time create one or more additional 
classes of shares, the terms of which may differ from the classes of 
shares described above. These may include classes subject to a CDSC, as 
well as classes subject to combinations of front-end sales charges, 
distribution fees and service fees different from those of Class A 
shares, Class C shares, and Class R shares. A Fund may, for example, 
offer a class or classes of shares, with or without front-end sales 
charges, that are subject to a service fee under a service plan 
substantially identical to a Rule 12b-1 Plan, but not adopted under 
rule 12b-1 (a ``Shareholder Service Plan'').
    8. The provision of services under a Shareholder Service Plan or 
Rule 12b-1 Plan (collectively, the ``Plans'') will augment (and not be 
duplicative of) the services to be provided to a Fund by its 
distributor, adviser, transfer agent, custodian, and other providers of 
recordkeeping services. Applicants will comply with Article III, 
Section 26, of the Rules of Fair Practice of the NASD regarding asset-
based sales charges and service fees. See Securities Exchange Act 
Release No. 30897 (July 7, 1992).
    9. A Fund may determine, on a Fund-by-Fund basis, to offer 
investors a class or classes of shares subject to a CDSC and 
distribution and service fees under a Rule 12b-1 Plan or a Shareholder 
Service Plan (``Class B shares''). In the event that a Fund decides to 
issue Class B shares, such shares would be offered for sale without the 
imposition of a sales charge at the time of purchase. An investor's 
proceeds from a redemption of Class B shares made within a specified 
period after purchase generally would be subject to a CDSC payable to 
the Distributor. The CDSC typically would be established in an initial 
amount that could range from 1% to 4% (but could be higher or lower) on 
shares redeemed during the first year after purchase, and typically 
would be reduced at a rat of either 1% of .5% per year for each 
subsequent year of the applicable CDSC period, so that redemptions of 
shares held after that period would be subject to a CDSC. Redemptions 
of Class B shares held by identified categories of investors also would 
not be subject to a CDSC. Class A shares following a specified number 
of years after purchase.
    10. Except as noted below, each class of shares generally may be 
exchanged only for shares of a class with similar characteristics in 
another Fund. Class R shares may be exchanged for Class A shares of a 
Fund at any time at the option of a Class R shareholder, provided the 
current net asset value of the shareholder's Class R shares is at least 
$1,000. Shares of any class of a Fund, including a class with a CDSC 
feature, may be exchanged for shares of any money market funds 
sponsored by Nuveen that do not impose a sales charge and may not be 
subject to a Rule 12b-1 Plan or Shareholder Service Plan (``Money 
Market Exchange Shares'').\1\ Additionally, exchanges may be permitted 
among dissimilar classes at the discretion of the directors of a Fund 
if a shareholder ceases to be eligible to purchase shares of the 
original class by reason of a change in the shareholder's status. All 
exchanges will comply with rule 11a-3 under the Act.

    \1\For purposes of imposing any applicable CDSC on redemptions 
of Money Market Exchange Shares (and applying any applicable 
conversion feature), the period during which the shareholder held 
the exchanged shares would be counted. A Fund may elect not to count 
the period during which the shareholder held the Money Market 
Exchange Shares. In the event that a Fund elected not to count the 
period during which the shareholder held the Money Market Exchange 
Shares, the amount of any applicable CDSC would be reduced in 
accordance with rule 11a-3(b)(5)(i)(A) under the Act by the amount 
of any Plan payments to which the Money Market Exchange Shares may 
be subject.
---------------------------------------------------------------------------

    11. Shares of one class (the ``Purchase Class'') will automatically 
convert at their net asset value to shares of another class with 
different features (the ``Target Class'') after the expiration of a 
specified period, subject to terms fully disclosed in a Fund's 
prospectus. This conversion feature will apply to convert Class C 
shares (and Class B Shares, if issued) to Class A shares, and may apply 
to convert shares of other classes established in the future to Class A 
shares. For purposes of the conversion, all Purchase Class shares in a 
shareholder's Fund account that were acquired through the reinvestment 
of dividends and other distributions paid in respect of such shares 
(and which had not yet converted) will be considered to be held in a 
separate subaccount. Each time any Purchase Class shares in the 
shareholder's Fund account are converted, an equal proportion of shares 
then in the subaccount also will convert, and will not longer be 
considered held in the subaccount.
    12. Any conversion of shares will be subject to the continuing 
availability of an opinion of counsel or a private letter ruling from 
the Internal Revenue Service to the effect that the conversion of 
shares would not constitute a taxable event under federal income tax 
law. Conversion of shares might be suspended if such an opinion or 
ruling were no longer available.
    13. Expenses attributable to a Fund but not to a particular series 
thereof (``Fund Expenses'') will be borne by shareholders of the Fund 
on the basis of relative aggregate net assets of the Fund without 
regard to class. In the case of a Fund that has multiple series, Fund 
Expenses will first be allocated among the series, based on the 
relative aggregate net assets of such series. Expenses that are 
attributable to a particular series, but not a particular class thereof 
would be borne by each class on the basis of the relative aggregate net 
assets of the classes. Each class will bear the Class Expenses and 
payments under any rule 12b-1 Plan and/or Shareholder Service Plan 
(``Plan Payments'') applicable to such class.
    14. Applicants propose that the Funds be permitted to impose a CDSC 
on redemptions of Class B shares. The amount of the CDSC and the timing 
of its imposition may vary. The CDSC will not be imposed on redemptions 
of Class B shares that were purchased more than a specified period (the 
``CDSC Period'') prior to redemption or on Class B shares derived from 
reinvestment of distributions. No CDSC will be imposed on an amount 
that represents an increase in the value of the shareholder's account 
resulting from capital appreciation above the amount paid for shares 
purchased during the CDSC Period; such a charge would be imposed, 
however, on the lesser of the net asset value of the shares redeemed 
(exclusive of any reinvestment of dividends or distributions) at the 
time of redemption or the net asset value of such shares at the time of 
purchase. In determining whether a CDSC is applicable, it will be 
assumed that a redemption is made first of shares derived from 
reinvestment of distributions or amounts that represent an increase in 
the value of the shareholder's account resulting from capital 
appreciation, second, of shares purchased prior to the CDSC Period, and 
third, of shares purchased during the CDSC Period. In determining the 
rate of any applicable CDSC, it will be assumed that a redemption is 
made of Class B shares of a Fund held for the longest period of time 
within the CDSC Period. The CDSC schedule will comply, to the extent 
applicable, with the requirements of section 26(d) of the Rules of Fair 
Practice of the NASD, as amended from time to time.
    15. Applicants intend to waive or reduce the CDSC in certain 
circumstances. In waiving or reducing a CDSC, the Funds will comply 
with rule 22d-1 under the Act.
    16. If redeemed shares upon which a CDSC was imposed are reinvested 
in Class B shares of the same Fund or another Fund within the period 
specified in the Fund's prospectus, Nuveen, as principal underwriter, 
will credit the shareholder's account with the amount of the CDSC 
previously imposed. The Class B shares acquired through such 
reinvestment will continue to be subject to the CDSC; the holding 
period of Class B shares thus acquired will include the holding period 
of the redeemed Class B shares.

Applicants' Legal Analysis

    1. Applicants request an exemptive order to the extent that the 
proposed issuance and sale of an unlimited number of classes of shares 
representing interests in the Funds might be deemed to result in a 
``senior security'' within the meaning of section 18(g) of the Act and 
thus to be prohibited by section 18(f)(1), and violate the equal voting 
provisions of section 18(i) of the Act.
    2. Section 18 is intended to prevent investment companies from 
issuing excessive amounts of senior securities and thereby increasing 
unduly the speculative character of their junior securities, or from 
operating without adequate assets or reserves. The proposed Multiple 
Class Plan does not involve borrowings, and does not affect the Funds' 
existing assets or reserves. In addition, the proposed arrangement will 
not increase the speculative character of the shares of the Funds, 
since each class of shares will participate in all of the Funds' 
appreciation or depreciation (if any), income, and all of a Fund's 
expenses (with the exception of the Plan Payments and Class Expenses).
    3. Applicants believe that the proposed allocation of Class 
Expenses in the manner described above, and the voting rights relating 
to the Rule 12b-1 Plans and Shareholder Service Plans are equitable and 
would not discriminate unfairly against any group of shareholders. 
Because, with respect to any Fund, the rights and privileges of each 
class of shares are substantially identical, the possibility that their 
interests would ever conflict would be remote. In any event, the 
interests of the affected shareholders with respect to distribution 
and/or service fees would be adequately protected since the 
distribution and service plans for each of those classes will conform 
to the requirements of rule 12b-1 (except that a Shareholder Service 
Plan may not confer certain voting rights), including the requirement 
that their implementation and continuance be approved on an annual 
basis by both the full board and the non-interested directors of the 
respective Funds.
    4. Applicants also request an exemption from the provisions of 
sections 2(a)(32), 2(a)(35), 22(c), and 22(d) of the Act, and rule 22c-
1 thereunder to the extent necessary to permit the Funds to offer 
shares subject to a CDSC. Applicants believe that implementation of the 
CDSC in the manner and under the circumstances described above would be 
fair and in the best interests of shareholders of the Funds, and would 
be appropriate in the public interest, and consistent with the 
protection of investors and the purposes fairly intended by the policy 
and provisions of the Act.

Applciants' Conditions

    Applicants agree that any order of the SEC granting the requested 
relief will be subject to the following conditions:
    1. Each class of shares will represent interests in the same 
portfolio of investments of a Fund or a series, and be identical in all 
respects except as set forth below. The only differences among the 
classes of shares of the same Fund or series will relate solely to (a) 
certain Class Expenses, which shall be limited to (i) transfer agent 
fees attributable to a specific class of shares; (ii) printing and 
postage expenses related to preparing and distributing materials such 
as shareholder reports, prospectuses, and proxy statements to current 
shareholders of a specific class; (iii) SEC and state securities 
registration fees incurred by a specific class of shares; (iv) the 
expenses of administrative personnel and services required to support 
the shareholders of a specific class; (v) litigation or other legal 
expenses relating to a class of shares; (vi) directors' fees or 
expenses incurred as a result of issues relating to a specific class of 
shares; and (vii) accounting expenses relating to a specific class of 
shares; (b) expenses payable by a class pursuant to a Plan with respect 
to such class; (c) the fact that the classes will vote separately with 
respect to the Funds' Rule 12b-1 Plans and Shareholder Service Plans, 
except as provided in condition 15 below; (d) conversion features; (e) 
exchange privileges; and (f) class designations. Any other incremental 
expenses not specifically identified above that are subsequently 
identified and determined to be properly allocated to one class of 
shares shall not be so allocated unless and until approved by the SEC 
pursuant to an amended order.
    2. The directors of each of the Funds, including a majority of the 
independent directors, will have approved the Multiple Class Plan prior 
to its implementation. The minutes of the meetings of the directors of 
the Funds regarding the deliberations of the directors concerning, and 
their approval of, the Multiple Class Plan will reflect in detail the 
reasons for their determination that the proposed Multiple Class Plan 
is in the best interests of both the Funds and their respective 
shareholders.
    3. On an ongoing basis, the directors of the Funds, pursuant to 
their fiduciary responsibilities under the Act and otherwise, will 
monitor each Fund for the existence of any material conflicts among the 
interests of the classes of shares. The directors, including a majority 
of the independent directors, will take such action as is reasonably 
necessary to eliminate any such conflicts that may develop. The Adviser 
and the Distributor will be responsible for reporting any potential or 
existing conflicts to the directors. If a conflict arises, the Adviser 
or the Distributor, each at its own cost, will remedy such conflict up 
to and including establishing a new registered management investment 
company.
    4. The Shareholder Service Plans will be adopted and operated in 
accordance with the procedures set forth in rule 12b-1(b) through (f) 
as if the expenditures made thereunder were subject to rule 12b-1, 
except that shareholders need not enjoy the voting rights specified in 
rule 12b-1.
    5. The directors will receive quarterly and annual statements 
concerning distribution and shareholder servicing expenditures 
complying with paragraph (b)(3)(ii) of rule 12b-1, as it may be amended 
from time to time. In the statements, only expenditures properly 
attributable to the sale or servicing of a particular class of shares 
will be used to justify any distribution or servicing fee charged to 
that class. Expenditures not related to the sale or servicing of a 
particular class will not be presented to the directors to justify any 
fee attributable to that class. The statements, including the 
allocations upon which they are based, will be subject to the review 
and approval of the independent directors in the exercise of their 
fiduciary duties.
    6. Dividends paid by a Fund with respect to each class of its 
shares, to the extent any dividends are paid, will be calculated in the 
same manner, at the same time, on the same day, and will be paid in the 
same amount, except that Plan Payments and any Class Expenses will be 
borne exclusively by that class.
    7. The methodology and procedures for calculating the net asset 
value and dividends and distributions of the classes of shares and the 
proper allocation of expenses among the classes have been reviewed by 
an expert (the ``Expert''). The Expert has rendered a report to 
applicants, filed with this application as Exhibit C, that such 
methodology and procedures are adequate to ensure that such 
calculations and allocations will be made in an appropriate manner. On 
an ongoing basis, the Expert, or an appropriate substitute Expert, will 
monitor the manner in which the calculations and allocations are being 
made and, based upon such review, will render at least annually a 
report to the applicants that the calculations and allocations are 
being made properly. The reports of the Expert shall be filed as part 
of the periodic reports filed with the SEC pursuant to sections 30(a) 
and 30(b)(1) of the Act. The work papers of the Expert with respect to 
such reports, following a request by the Funds (which the Funds agree 
to provide), will be available for inspection by the SEC staff, upon 
the written request for such work papers by a senior member of the 
Division of Investment Management, limited to the Director, an 
Associate Director, the Chief Accountant, the Chief Financial Analyst, 
an Assistant Director, and any Regional Administrators or Associate and 
Assistant Administrators. The initial report of the Expert is a 
``report on the policies and procedures placed in operation,'' and the 
ongoing reports will be ``reports on policies and procedures placed in 
operation and tests of operating effectiveness'' as defined and 
described in SAS No. 70 of the American Institute of Certified Public 
Accountants (``AICPA''), as it may be amended from time to time, or in 
similar auditing standards as may be adopted by the AICPA from time to 
time.
    8. Applicants have adequate facilities in place to ensure 
implementation of the methodology and procedures for calculating the 
net asset value and dividends and distributions of the classes of 
shares and the proper allocation of expenses among the classes of 
shares, and this representation has been concurred with by the Expert 
in the initial report referred to in condition 7 above, and will be 
concurred with by the Expert, or an appropriate substitute Expert, on 
an ongoing basis at least annually in the ongoing reports referred to 
in condition 7 above. Applicants agree to take immediate corrective 
action if this representation is not concurred in by the Expert or 
appropriate substitute Expert.
    9. The prospectus of each Fund will include a statement to the 
effect that any person entitled to receive compensation for selling or 
servicing Fund shares may receive different compensation with respect 
to one particular class of shares over another in the Fund.
    10. Any distributor will adopt compliance standards as to when each 
class of shares may be sold to particular investors. Applicants will 
require all persons selling shares of a Fund to agree to conform to 
such standards.
    11. The conditions pursuant to which the exemptive order is granted 
and the duties and responsibilities of the directors of the Funds with 
respect to the Multiple Class Plan will be set forth in guidelines, 
which will be furnished to the directors.
    12. Each Fund will disclose the respective expenses, performance 
data, distribution arrangements, services, fees, sales loads, deferred 
sales loads, and exchange privileges applicable to each class of shares 
in every prospectus, regardless of whether all classes of shares are 
offered through each prospectus. Each Fund will disclose the respective 
expenses and performance data applicable to all classes of shares in 
every shareholder report. The shareholder reports will contain, in the 
statement of assets and liabilities and statement of operations, 
information related to the Fund as a whole generally, and not on a per 
class basis. Each Fund's per share data, however, will be prepared on a 
per class basis with respect to all classes of shares of such Fund. To 
the extent any advertisement of sales literature describes the expenses 
or performance data applicable to any class of shares, it will also 
disclose the respective expenses and/or performance data applicable to 
all classes of shares. The information provided by applicants for 
publication in any newspaper or similar listing of the Fund's net asset 
value and public offering price will present each class of shares 
separately.
    13. The initial determination of Class Expenses that will be 
applied to a class and any subsequent changes thereto will be reviewed 
and approved by a vote of the board of directors, including a majority 
of the independent directors. Any persons authorized to direct the 
application and disposition of monies paid or payable by a Fund to meet 
Class Expenses shall provide to the board of directors, and the 
directors shall review at least quarterly, a written report of the 
amounts so expended and the purposes for which such expenditures were 
made.
    14. Any class of shares with a conversion feature will convert into 
another class of shares on the basis of the relative net asset values 
of the two classes, without the imposition of any sales load, fee, or 
other charge. After conversion, the converted shares will be subject to 
an asset-based sales charge and service fee to which they were subject 
prior to the conversion.
    15. If a Fund implements any amendment to a Rule 12b-1 Plan (or, if 
presented to shareholders, adopts or implements any amendment of a 
Shareholder Service Plan) that would increase materially the amount 
that may be borne by the shares of a Target Class under the plan, 
existing Purchase Class shares will stop converting into the Target 
Class unless the Purchase Class shareholders, voting separately as a 
class, approve the proposal. The directors shall take such action as is 
necessary to ensure that existing Purchase Class shares are exchanged 
or converted into a new class of shares (``New Target Class'') 
identical in all material respects to the Target Class as it existed 
prior to implementation of the proposal, no later than the date such 
shares previously were scheduled to convert into the Target Class. If 
deemed advisable by the directors to implement the foregoing, such 
action may include the exchange of all existing Purchase Class shares 
for a new class (``New Purchase Class''), identical to existing 
Purchase Class shares in all material respects except that New Purchase 
Class will convert into New Target Class. New Target Class or New 
Purchase Class may be formed without further exemptive relief. 
Exchanges or conversions described in this condition shall be effected 
in a manner that the directors reasonably believe will not be subject 
to federal taxation. In accordance with condition 3, any additional 
cost associated with the creation, exchange, or conversion of New 
Target Class or New Purchase Class shall be borne solely by the adviser 
and the distributor. Purchase Class shares sold after the 
implementation of the proposal may convert into Target Class shares 
subject to the higher maximum payment, provided that the material 
features of the Target Class plan and the relationship of such plan to 
the Purchase Class shares are disclosed in an effective registration 
statement.
    16. Applicants acknowledge that the grant of the exemption 
requested by the application will not imply SEC approval, 
authorization, or acquiescence in any particular level of payments that 
the Funds may make pursuant to Rule 12b-1 Plans or Shareholder Service 
Plans in reliance on the exemptive order.
    17. Applicants will comply with the provisions of rule 6c-10 under 
the Act, Investment Company Act Release No. 16619 (Nov. 2, 1988), as 
such rule is currently proposed and as it may be reproposed, adopted, 
or amended.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary
[FR Doc. 94-19448 Filed 8-9-94; 8:45 am]
BILLING CODE 8010-01-M